Duty re-determination on actual production and factory closure abatement must be tested against the statutory record before denial.

Duty determined under annual capacity rules remained open to re-determination on proof of lower actual production, even where payment had been opted under Rule 96ZO(1), and the assessee's production records had to be examined before refusing relief. The claim for abatement for alleged factory closure also required verification of the mandatory closure and restart intimations, together with the supporting departmental records, before rejection. Both issues were remitted for fresh consideration on the basis of the relevant production and closure evidence.

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Issues: (i) Whether the assessee, having opted for duty payment under Rule 96ZO(1), could seek re-determination of duty on the basis of actual production under Section 3A(4) and Section 3A(5). (ii) Whether the assessee was entitled to abatement for the period of alleged factory closure.

Issue (i): Whether the assessee, having opted for duty payment under Rule 96ZO(1), could seek re-determination of duty on the basis of actual production under Section 3A(4) and Section 3A(5).

Analysis: The scheme of Section 3A permits determination of annual capacity of production and also provides a mechanism for re-determination where the assessee claims that actual production is lower than the capacity fixed. The fact that duty was payable under Rule 96ZO(1) did not exclude the operation of Section 3A(4) and Section 3A(5). The statutory records reflecting production were relevant and ought to be examined before rejecting the claim.

Conclusion: The claim for re-determination of duty on the basis of actual production was maintainable and had to be examined afresh by the Commissioner.

Issue (ii): Whether the assessee was entitled to abatement for the period of alleged factory closure.

Analysis: The claim for abatement turned on whether the mandatory closure and restart intimations had been given and whether the factory had in fact remained closed during the relevant period. The record showed that these aspects required verification by reference to the departmental acknowledgements and related records, and the rejection of abatement without such verification was not justified.

Conclusion: The claim for abatement was required to be reconsidered by the Commissioner on the basis of the relevant records and facts.

Final Conclusion: The matter required fresh consideration by the Commissioner on both the re-determination of duty and the abatement claim, with the assessee's entitlement to be assessed on the relevant production and closure records.

Ratio Decidendi: Where the statutory scheme provides for duty determination on annual capacity and also for re-determination on proof of lower actual production, the adjudicating authority must examine the assessee's relevant production records before denying relief; claims for abatement based on closure must likewise be decided on the factual record and not on a mere failure to consider available evidence.

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